This is Sudarshan's blog - www.sudarshanonline.com. It discusses the technical analysis of Indian Stock Markets emphasising on online day trading and futures trading strategies.

Thursday, March 18, 2010

Reader Suggestions Wanted

tushki asks:

"sir pls suggest me levels for bank nifty...i had short sell it at 8500"

My Notes: I am giving below the chart for Bank Nifty Near Month futures. I request readers to give their suggestions to tushki. You should write your suggestions as comments to this post. Please keep your advise focussed and actionable. I will be grateful for all responses.

Also: I will be in Ahmedabad on 19th + 20th March for the CNBC Investor Camp. Readers are welcome to meet me.

Dear TushkiAs you sold Banknifty @ 8500, your ideal stoploss should have been jsut above the breakout level of 8600-8620. Current market price indicates that you were wrong , you should accept it and close the position.

Exit short position, enter again in the direction of trend, which is up till now. For the short term, todays breakout may take it upto 9350-9500, as it has completed Inverted H&S pattern and price has come out of pattern.

8500 was the breakout point. trading strategies should be must before jumping to trade.now book loss,if he has enough fund try for some real estate stocks DLF looks good.as risk reward ratio is small . regards-rajamani

well the trader shorted the bank nifty at 8500 on 26 /2 the bank nifty brokeout and had a buy signal that was were the trader should have got out.The trader has already carried a position wth a huge loss which is not prudent but lookin at the trade i would not suggest the trader now to book the loss as the bank nifty has rallied and reached resistance levels and the markets have also rallied to the highs n 5250-5300 are resistance zones so the trader can probably hve a stoploss of 9350 on closing basis n hope the markets retrace down from there n then exit.

Exit your bank nifty future short position immediately. Bank Nifty was a breakout at 8600 - 8700 levels and also completed its inverted head & shoulder target. Please follow stoploss very strictily. As per Sudarshan sir identify a Hammer Pattern on monthly charts after a decline, means you should cover your shorts and wait for decline to buy it a lower levels.

Nifty and bank nifty are at their upper band, I will suggest remaining short / roll over and if possible averaging it by adding one more short at 9300+ level, and wait for market to correct on any negative news … (like Dubai, Greece or any new destination may pop up any time), it may take 20-30days.

I would like to share my experience: In early Feb I bought 3 lots of March bank nifty at 8125 level, and recently booked profit at 9180. Now, I am short with one lot at 9206, and may add couple of more shorts at 9300 and 9400 levels, and wait for markets to consolidate.

Ignoring the mistake, i will suggest to hold this short with SL of 9350 on closing basis. Bank nifty has strong resistance at 9300-9350 on weekly chart. If respected will retrace to 8300-8500.If breakout happens target will be 10200-10300.

Please..please do not do what you did....it is a sin in trading. Where was you SL when you inititated this trade. Learn from this mistake and move ahead.